ICICI LOMBARD GENERAL INSURANCE COMPANY LIMITEDversusRANIBEN RAJABHAI KARMATA

     C/FA/1822/2022                               JUDGMENT DATED: 09/01/2026




             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                      R/FIRST APPEAL NO. 1822 of 2022


FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR
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         Approved for Reporting         Yes      No

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         ICICI LOMBARD GENERAL INSURANCE COMPANY LIMITED
                                Versus
                  RANIBEN RAJABHAI KARMATA & ORS.
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Appearance:
MR CHIRAYU A MEHTA(3256) for the Appellant(s) No. 1
NISHIT A BHALODI(9597) for the Defendant(s) No. 1,2,3,4,5
RULE SERVED for the Defendant(s) No. 6,7
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  CORAM:HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR

                             Date : 09/01/2026

                             ORAL JUDGMENT

1.       Being aggrieved and dissatis7ed with the judgment and award dated
05.05.2022 passed by the Motor Accident Claims Tribunal (Aux), Rajkot at
Dhoraji, in Motor Accident Claim Petition No. 33 of 2020, 7led under Section
166 of the Motor Vehicles Act, 1988 (for short, “the MV Act”), the appellant
prefers appeal under Section 173 of the Motor Vehicles Act, 1988, whereby,
the Tribunal has been pleased to partly allow the claim petition and
awarded compensation of Rs.24,48,000/-.

2.       Heard Mr. Chirayu Mehta, learned advocate for the appellant-
Insurance Company and Mr. Nishit Bhalodi, learned advocate appearing for
the original claimants. Though served, none appears for respondent Nos.6
and 7.




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3.     Mr. Chirayu Mehta , learned counsel for the appellant has submitted
that the Tribunal has erred in holding the appellant liable despite the fact
that the vehicle was used for the purpose which was in violation of the
terms of the policy. The Tribunal has failed to appreciate the fact that at the
time of accident, driver of motorcycle bearing NO.GJ32N 4005 was not
holding a valid and eEective license.

4.     Mr. Nishit Bhalodi, learned advocate for the claimants has opposed
the present appeal on the ground that the Tribunal has not committed any
error in passing the judgment and award. Therefore, the Insurance Company
cannot be exonerated from its legal liability to pay the awarded amount of
compensation. He further submitted that the claimants are third parties,
and the insurance policy produced on record clearly shows that the risk of
third parties was covered under the policy. Consequently, the owner and the
driver of the oEending vehicle are vicariously liable to indemnify the third-
party claimants. Hence, the learned Tribunal has not committed any error in
fastening the liability jointly and severally. In support of his submissions, he
has relied upon the judgments of the Hon’ble Supreme Court in the cases of
Shamanna v. Oriental Insurance Co. Ltd., (2018) 9 SCC 650, wherein the
order of pay and recover was aHrmed, and Shivraj v. Rajendra, (2018) 10
SCC 432, wherein it has been held that the High Court ought to pass an
order of pay and recover, keeping in mind the ratio laid down in National
Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297; Mangla Ram v.
Oriental Insurance Co. Ltd.; and Manuara Khatun v. Rajesh Kumar Singh
(supra). He has also relied upon the orders passed by the Coordinate Bench
in First Appeal No. 2376 of 2014, First Appeal No. 679 of 2016, and First
Appeal No. 3715 of 2024, and has requested that the present appeal be
dismissed, submitting that the Tribunal has the power to pass an order of
pay and recover.


5.     Having heard learned counsel for the respective parties and perusing
material placed on record, it appears that the Tribunal has not committed



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any error in considering the evidence produced on record to award just
compensation of Rs.24,48,000/-. Hence, quantum does not call for any
interference. Even quantum part is not seriously disputed by either of the
parties. Hence, appeal is considered only on the part of “pay and recovery”.
The Insurance Company has submitted that on the ground of violation of
the terms and conditions of the insurance policy, it is required to be
exonerated from its liability. However, an insurance policy is a statutory
contract entered into between the insurer and the insured for the bene7t of
third parties. The aforesaid ratio has also been followed by the Hon’ble
Apex Court in Shamanna vs. Oriental Insurance Co. Ltd., (2018) 9 SCC 650,
wherein, while considering Sections 147 and 149 of the Motor Vehicles Act,
it has been held that the victim of a motor vehicle accident is a third party,
and it is the statutory duty of the insurer to satisfy the award. The principle
of “pay and recover” has been reiterated, holding that if the driver had no
valid driving licence and there was a breach of policy conditions, the High
Court ought not to interfere with the order of “pay and recover” passed by
the Tribunal. If the Insurance Company has paid any amount, the mode of
recovery is also provided, and the insurer has the liberty to initiate
proceedings before the executing Court concerned, if the dispute is
between the insurer and the owner. In the present case, the claimants are
third party and has no concern with the inter se terms and conditions of the
insurance policy. Hence, in view of the decisions of the Hon’ble Supreme
Court in Anu Bhanvara & Ors. vs. IFFCO Tokio General Insurance Co. Ltd. &
Ors., (2020) 20 SCC 632; Sunita & Ors. vs. United India Insurance Co. Ltd. &
Ors.; and Rama Bai vs. M/s. Amit Minerals, 2025 INSC 1162, the learned
Tribunal has not committed any error in awarding compensation.

6.     Further, this Court deems it 7t to refer to the judgment of the
Hon’ble Apex Court in Sadhna Tomar v. Ashok Kushwaha, 2025 SCJ 414,
wherein the Tribunal was pleased to pass an award of compensation in
favour of the claimant, holding that the Insurance Company shall pay the
amount of compensation to the claimant and thereafter recover the same



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from the driver and owner of the oEending vehicle, who were held jointly
and severally liable, relying on the decision in Swaran Singh (supra). The
said view was aHrmed by the High Court, and the order of “pay and
recover” was also upheld by the Hon’ble Apex Court. In view of the above,
the learned Tribunal has not committed any error in passing the order of
“pay and recover”.


7.     The Hon’ble Supreme Court in the cases of Shamanna (supra), Rama
Bai (supra), and Swaran Singh (supra) has consistently held that the insurer
must 7rst pay the compensation amount to the third party and may
thereafter recover the same from the insured. Even though the insurer is
entitled to raise a valid defence regarding the driver not possessing a valid
driving licence under Section 149(2)(a)(ii) to avoid liability, and even if the
conditions of law are satis7ed to absolve the insurer from paying the
compensation, the doctrine of “pay and recover” continues to apply.

8.     In view of the judgment of the Hon’ble Supreme Court in Rambabu
Tiwari vs. United India Insurance Co., (2008) 8 SCC 165, wherein the Court
exonerated the Insurance Company from liability for breach of policy
conditions but refused to interfere with the order of “pay and recover”, the
direction issued by the learned Tribunal in the present case also does not
warrant any interference.

9.     In view of the reliance placed by the learned advocate for the
appellant, no assistance can be derived by the appellant–Insurance
Company, as the Hon’ble Supreme Court has reaHrmed the social welfare
intent underlying the Motor Vehicles Act. The principle or order of “pay and
recover” embodies judicial empathy, ensuring that victims are not left
uncompensated due to disputes between the owner and the insurer. At the
same time, considering contractual accountability, an owner who breaches
the conditions of the policy cannot escape 7nancial responsibility, as
insurers retain the right to recover the amount paid to the claimant. This
dual balance justice to the victim and fairness to the insurer strengthens the



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integrity of the Motor Vehicles accident compensation system.

10.     As regards the authority relied upon by the learned advocate for the
appellant, in view of several judgments wherein the Hon’ble Apex Court has
passed order in the case of Shamanna (supra), Parminder Singh v. New
India Assurance Company Limited, (2019) 7 SCC 217, the learned Tribunal
has not committed any error. The authorities relied upon by the learned
advocate for the appellant nowhere refer to the case of Samanna (supra).

11.     In view of the above, the Hon’ble Apex Court has already decided the
issue     in     Swaran   Singh   (supra).       Considering    the     subsequent
pronouncements discussing the scope of the ‘pay and recover’ order and the
benevolent object of the legislation, as earlier explained in paragraph 14 of
this order, the principle of ‘pay and recover’ reMects judicial empathy
ensuring that victims are not left uncompensated due to disputes between
the owner and the insurer. Therefore, the argument canvassed by the
learned advocate for the appellant regarding contractual accountability is
not acceptable and Tribunal has not committed any error in passing the
order of “pay and recover”.

12.     The appellant–Insurance Company is directed to pay the amount of
compensation determined by the Tribunal, with liberty to recover the same
from the owner of the oEending vehicle in accordance with law. In view of
the law laid down by the Hon’ble Apex Court in Oriental Insurance Co. Ltd.
v. Nanjappan, (2004) 13 SCC 224, it is always open for the Insurance
Company to recover the amount from owner by initiating appropriate
proceedings before the Executing Court, without being required to 7le a
separate suit. While passing the order of "pay and recover", the Tribunal
shall issue appropriate directions to protect the interest of the Insurance
Company, as directed by the Hon’ble Apex Court in Nanjappan (supra),
subject to suitable conditions and safeguards..

13.     In view of the above conspectus, no interference is called for in order
passed by the learned Tribunal of “pay and recover”. The present First
Appeal stands dismissed.


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        C/FA/1822/2022                                                      JUDGMENT DATED: 09/01/2026




 14.       The appellant – insurance company is directed to deposit the entire
 amount of compensation as awarded by the learned Tribunal in the
 impugned judgment and award alongwith accrued interest on the said
 amount within a period of four weeks from the date of receipt of this order
 with the learned Tribunal.

 15.       After deposit of the amount of compensation by the appellant –
 insurance company, the same shall be disbursed in favour of the claimant
 and/or her guardian and father through RTGS, after proper veri7cation. The
 bank account details shall be furnished by the learned advocate for the
 claimant to the Nazir Department of the learned Tribunal concerned. The
 Court fees, if any, payable by the claimant on compensation be deducted
 from the said amount and the remaining amount of compensation be
 disbursed in favour of the claimants on due veri7cation.

 16        Record and proceedings, if any, be sent back to the concerned
 Tribunal forthwith.




                                                                           (HASMUKH D. SUTHAR,J)
 SUCHIT

Original copy of this order has been signed by the Hon'ble Judge.
Digitally signed by: PATEL SUCHIT JAYESHBHAI(HC01083), Private Secretary, at High Court of Gujarat on 15/01/2026 16:21:59




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